CASHLESS ECONOMY

PERIOD IN INDIA
A REVOLUTION IN DIGITAL INDUSTRY
 ACKNOWLEDGEMENT
I WOULD LIKE TO EXPRESS MY THANKS TO ALL MY MEMBERS
WHO HAVE HELPED ME IN THE COMPLETION OF THIS PROJECT
WHERE THEY ALL EXCHANGED THEIR OWN INTERESTING IDEAS
AND THOUGHTS AND MADE IT POSSIBLE TO COMPLETE THIS
PROJECT.

I WOULD ALSO LIKE TO EXPRESS MY GRATITUDE TO OUR

ECONOMICS PROFESSOR MS PRIYANKA ARORA WHO GAVE US THE
OPPORTUNITY TO DO THE PROJECT ON “CASHLESS ECONOMY OF
INDIA” WHICH HELPED ME IN DOING A LOT OF RESEARCH. I AM
ALSO GRATEFUL FOR HER NONSTOP SUPPORT FOR THE PROJECT.
WITHOUT HER SUPPORT IT WOULD NOT BE POSSIBLE TO
COMPLETE THE PROJECT ON TIME .

-VANSH GOYAL
 What is cashless economy?
Cashless Economy can be defined as a situation in which the
flow of cash within an economy is non-existent and all
transactions must be through electronic channels such as direct
debit, credit cards, debit cards, electronic clearing, and payment
systems such as Immediate Payment Service (IMPS), National
Electronic Funds Transfer (NEFT) and Real-Time Gross
Settlement (RTGS)
Mobile Wallet Transactions FY13-FY17
Volume(INR Millions)
1800

1600
1630
1400

1200

1000
Volume(INR Millions)
800

600
604
400

200 255
33 108
0
2013 2014 2015 2016 2017
Effect of demonetization on the industry
O N N O V E M B E R 8 , 2 0 1 6 , T H E H O N O R A B L E P R I M E M I N I S T E R A N N O U N C E D T H E D E M O N E T I Z AT I O N
O F A L L I N R 5 0 0 A N D I N R 1 , 0 0 0 B A N K N O T E S . G I V E N T H E W I D E C I R C U L AT I O N O F T H E S E N O T E S ,
T H E I M M E D I AT E I M PA C T O F T H E A N N O U N C E M E N T W A S A S E A R C H A M O N G C O N S U M E R S F O R
A LT E R N AT I V E PAY M E N T M O D E S S U C H A S C A R D S , M O B I L E W A L L E T S E T C . T H E I N D U S T R Y S A W A N
I M M E D I AT E S U R G E A S A R E S U LT O F T H E P O L I C Y C H A N G E A N D I N T H E M O N T H S F O L L O W I N G ,
D I G I TA L PAY M E N T S I N C R E A S E D A N D M O B I L E W A L L E T S ( P P I S ) G A I N E D S I G N I F I C A N T S H A R E O F
T H O S E T R A N S AC T I O N S, A S S H O W N I N T H E C H A RT B E LO W: T H E I N D I A N M O B I L E W A L L E T M A R K E T
I S H I G H LY F R A G M E N T E D A N D C O M P E T I T I V E . P L AY E R S I N T H E M A R K E T H A V E U S E D H E A V Y
D I S C O U N T I N G T O AT T R A C T U S E R S T O T H E I R P L AT F O R M S . B E T W E E N N O V E M B E R 2 0 1 6 A N D
M A R C H 2 0 1 7 , T H E S H A R E O F P P I S I N A L L D I G I TA L PAY M E N T S H A S M O R E T H A N D O U B L E D T O
REACH 22%.
In establishing their own
mobile payments ecosystem
and increasing mindshare in
the digital payment space
banks I have taken a series
of steps in order to be
competitive
Growth in digital payment industry in India
T H E A DV E N T O F S M A R T P H O N E S A N D T H E I N T E R N E T H A S O P E N E D U P A H O S T O F F O R M
FA C TO RS A N D A C C E S S TO PAY M E N T T EC H N O LO G I ES F RO M P E E R TO P E E R T R A N S F E R TO
C A M E R A E N A B L E D Q R C O D E S C A N N I N G A N D VO I C E B A N K I N G D I G I TA L PAY M E N T S H AV E
C O M E A LO N G WAY A L S O T H E R E I S A N I N C R EA S E I N S M A R T P H O N E U S E R B A S E W H I C H I S
F O R EC A S T E D TO G R OW AT 1 5 . 5 % O F C A G R TO 8 2 9 M I L L I O N BY 2 0 2 2 PAY T M Q R I S
V I S I B LY S E E N AT D I F F E R E N T R E TA I L S TO R E S H OT E L S S M A L L M E R C H A N T S E TC A N D H A S
OV E R 1 2 M I L L I O N M E R C H A N T S W H O A R E P R OV I D E D A R A N G E O F S E RV I C E S F O R
E N A B L I N G D I G I TA L PAY M E N T S F O R A L L I N S T R U M E N T S L I K E WA L L E T, U P I , C A R D S E TC
 Role of government in digital
infrastructure
TH E GOV E RNM ENT H A S A L S O TH E R B I H A S
I N TRO DUCED V IS IO N 2 1 W I TH 3 6 AC TI O N PO I N TS FO R
M OV ING I N D I A TOWA R DS CA S HLES S S O CIETY. THE
GOV E R NMENT H A S A L S O FO C U S ED O N E N A BL ING U S S D
BA S E D M O B ILE PAYM E N TS TO TA P R U R A L M A R K ETS
W H I C H LAC K IN TE R NET CO NNEC TI VITY A N D
S M A RTPH O NE PE N E TRATION. TH E R E H A S B E E N A
GROW TH O F N EA R LY 3 3 % YEA R O N YEA R I N WA L L ET
BA S E D TR A N SAC TI ONS IN LA ST TWO YEA RS . UPI
W H I C H WA S IN TRO DU CED I N 2 0 1 6 H A S S E E N A 3 5 % -
4 0 % M O N TH O N M O N TH GROW TH I N B OTH VA LU E A N D
VO LU M E O F TR A N SAC TI ONS S I N C E D EC EMBER 2 0 1 6.
TH E GOV E RNM ENT H A S PRO PO S E D TO A M E N D TH E
PAYM E NT A N D S E T TL E MENT SYSTE M S AC T, 2 0 0 7 TO
PROV I DE TH AT N O BA N K O R SYSTE M PROV IDER S HA LL
IM PO S E A N Y C H A RGE FO R US IN G E LECTRO NIC M O D ES
FO R PAYM E NTS TO A B U S I N ES S TH AT H A S TOTA L
TU R N OV ER E XC EEDI NG 5 0 0 M I L L I ON
 Ecosystem of mobile payments in
India
THE MOBILE PAYMENT SERVICE PROVIDERS HAVE REDEFINED THE WAY IN W HICH
BUSINESSES AND CONSUMERS CARRY OUT ROUTINE PAYMENTS BY OFFERING HOST
OF SERVICES. THE MOBILE PAYMENT SERVICE PROVIDERS ARE AT FOREFRO NT IN
MAKING EFFECTIVE USE OF “MOBILE FIRST” STRATEGY. ONE SUCH EXAMPL E IS
PAYTM WHICH CONNECTS WITH USER’S DAILY NEEDS INSTANTLY. PHONE PE HAS
OPENED UP THEIR PLATFORM FOR MERCHANTS TO ACCESS THE PHONE PE
CUSTOMER BASE BY OPENING UP THEIR OWN STORES WITHIN THE APPLICAT ION.
THE INDIAN MOBILE PAYMENT MARKETS HAS SEEN POSITIVE INVESTOR SEN TIMENT
IN ITS GROWING YEARS WITH LARGE INVESTMENTS AND ACQUISITIONS TAR GETING
FAST GROWTH START UPS.
 CONCLUSION
W E W E R E D E L I G H T E D TO M A K E A P R OJ EC T O N “ C A S H L E S S EC O N O M Y O F I N D I A” A N D W E
H AV E G A I N E D U S E F U L I N S I G H T S A B O U T T H E C A S H L E S S EC O N O M Y R E VO LV I N G A R O U N D
U S . W E H AV E A L S O U N D E RS TO O D T H E R O L E O F VA R I O U S I N S T I T U T I O N S A N D T H E
G OV E R N M E N T O F I N D I A W H I C H P L AY A V E RY I M P O R TA N T R O L E TO P R O M OT E C A S H L E S S
T R A N S A C T I O N S . T H E WO R L D I S C H A N G I N G R A P I D LY A N D S O D O T H E WAY S
T R A N S A C T I O N S TA K I N G P L A C E B E T W E E N P E RS O N S . C A S H L E S S PAY M E N T S A R E T H E
F U T U R E O F T H I S C H A N G I N G WO R L D. W E H AV E A L S O A C K N OW L E D G E D T H E FA C T T H AT
E V E RY T H I N G I S G O I N G TO B E V I R T UA L . W E , W I T H A L L O U R R E S P EC T T H A N K M S
P R I YA N K A A R O R A W H O G AV E U S T H E O P P O R T U N I T Y TO M A K E S T U DY A B O U T C A S H L E S S
EC O N O M Y A N D M A K E A P R OJ EC T O N T H E S A M E .
 BIBLIOGRAPHY
• Fintech in India – Powering mobile phttps://assets.kpmg/content/dam/kpmg/in/pdf/2019/08/Fintech-in-
India%E2%80%93Powering-mobile-payments.pdfayments (assets.kpmg)

• https://byjus.com/free-ias-prep/cashless-
economy/#:~:text=Cashless%20Economy%20can%20be%20defined%20as%20a%20situation,%28NEFT%29%
20and%20Real-Time%20Gross%20Settlement%20%28RTGS%29%20in%20India.

• in-strategy-leading-the-cashless-charge-noexp.pdf (deloitte.com)

• https://www.bing.com/

• Five years after demonetisation, https://www.businesstoday.in/latest/economy/story/five-years-after-

demonetisation-notes-in-circulation-on-rise-digital-payments-also-surge-311520-2021-11-07notes in circulation
on rise; digital payments also surge – BusinessToday

• http://www.cashlessindia.gov.in/digital_payment_methods.html/

• http://www.pbr.co.in/2018/2018_month/March/6.pdf#:~:text=cashless%20economy%20in%20India%20can%20b
e%20seen%20as,infrastructures%20and%20spreading%20digital%20transaction%20habits%20among%20peopl
e./